After my 25 years in this business and seven years teaching at The Stillman School of Business at Seton Hall University, there is one thing that I can predict about the current earnings season. Actually, I can state it with 100% certainty: This earnings season will be unpredictable. They all are.

The second quarter of 2009 will be further clouded by the enduring uncertainty of the deep recession. Every so often, one or two business sectors set the tone for earnings season. I believe that this time around there will be a great deal of focus on the financial services industry. This segment could determine if the recent market rally continues of if it falters.

This group of companies has been hardest hit by the financial crisis and recession. During the quarter, many financial institutions have been able to raise additional capital and in some instances pay back loans received under the TARP program. Some of this may be factored into the recent rally in many of these stocks off of the March bottom.

One of the first financials to report was Goldman Sachs ( GS), which announced on Tuesday. The company's better-than-expected earnings confirmed that Goldman has little or no risk, unlike other banks that are embroiled in the credit and mortgage crisis.

Here are five factors that could determine the success or failure of this industry for the second quarter of 2009:

1. The industry as a whole, especially the larger and in some respects more-endangered institutions, has significantly increased its capital position through capital issuance and improved results. Tier 1 capital, which is the measure of a bank's core capital position, will be at significantly higher levels than it's been for the past few quarters. Expect improvements at Bank of America ( BAC), JPMorgan Chase ( JPM), State Street ( STT) and some regional banks.

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